Usage-based studies of word formation usually focus on written and monologic texts. In contrast, this paper argues for the investigation of word formation in (oral) interaction. By discussing the current state of research on word formation in spoken German and by analyzing a corpus of different genres (e. g. face-to-face everyday conversation, WhatsApp communication), the interactional potential and relevance of word formation in dialogic communication will be exemplified and outlined. The focus is on case studies of different functions of word formation, e. g. specification and differentiation or word play through word formation.